Deutsche Bank’s Financial Crimes Cop to Quit Over Staffing

Deutsche Bank AG’s executive in charge of preventing financial crimes and money laundering, Peter Hazlewood, will step down after only six months, in a disagreement that involved staffing for his group, according to two people familiar with the matter.

Hazlewood resigned after the bank last month cut back ambitious plans to almost double staffing at the unit, according to the people, who asked not to be identified because the information is private. He will probably continue to work for Deutsche Bank in a different role, said one of the people. A replacement may be announced in the coming days.

The abrupt move highlights the difficulties for Chief Executive Officer John Cryan, who is trying to both cut costs and avoid more legal battles, following a $7.2 billion settlement in principle with the U.S. over its role in the sale of mortgage securities in the run-up to the 2008 financial crisis. As the bank’s global head of Deutsche Bank’s anti-financial crime unit and group money-laundering reporting officer, Hazlewood was an important executive for the bank’s relations with regulators.

Deutsche Bank is still being probed by U.S. and U.K. authorities over whether it failed to catch transactions that may have moved billions of dollars out of Russia, people familiar with the matter have said. Those transactions occurred before Hazlewood joined the bank.

Hazlewood’s anti-financial crime unit had roughly 780 employees at the end of 2016, the people said, up from about 600 at the start of last year. He had sought to increase that number by more than 600 this year, but the bank only approved about 400 new hires, according to the people. Cryan implemented a company-wide hiring freeze in 2016, though that freeze excluded compliance-related roles.

Some top executives at Deutsche Bank were unhappy with Hazlewood’s management style, said one of the people. Hazlewood, who previously worked at lenders including JPMorgan Chase & Co. and HSBC Holdings Plc, currently reports to Deutsche Bank’s chief regulatory officer, Sylvie Matherat.

News that he was stepping down was reported earlier Wednesday by Manager Magazin.

After settling the mortgage securities case in the U.S. last month, Cryan said in a memo to staff that an internal investigation by the bank had found “no indication of a breach of sanctions” in Russia. The probe did detect “deficiencies” in the bank’s systems and controls that were being addressed, according to the memo.